UNITIL Corporation (UTL)

UNITIL Corporation's liquidity ratios indicate a declining trend over the years. The current ratio has decreased from 1.02 in 2020 to 0.83 in 2024, suggesting a potential strain on the company's ability to meet its short-term obligations with current assets. Similarly, the quick ratio has decreased from 0.54 in 2020 to 0.38 in 2024, indicating a diminishing ability to cover immediate liabilities without relying on inventory.

The cash ratio, which reflects the company's ability to cover its current liabilities with cash and cash equivalents, has also shown a downward trend, from 0.04 in 2020 to 0.03 in 2024. This indicates a decreasing capacity to pay off short-term obligations using readily available cash resources only.

Overall, the decreasing liquidity ratios over the years suggest that UNITIL Corporation might face challenges in meeting its short-term financial obligations without further improvements in its liquidity position. Management may need to monitor and address this trend to ensure the company's financial stability and ability to withstand unforeseen challenges.

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Additional liquidity measure

The cash conversion cycle of UNITIL Corporation has shown varying trends over the past five years. As of December 31, 2020, the company had a negative cash conversion cycle of -11,239.26 days, indicating an inefficient management of cash flows. However, this improved significantly by the end of 2021, with the cycle reduced to -21.83 days. The trend continued to improve through 2022 and 2023, reaching -22.45 days and -4.83 days, respectively.

Despite this progress, there was a slight increase in the cash conversion cycle by the end of 2024, with a value of -12.29 days. Overall, the company has managed to streamline its cash conversion cycle over the years, indicating more efficient management of its working capital and improved cash flow operations.